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Property Rights Protection of Biotechnology Innovations

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  • Diana M. Burton
  • H. Alan Love
  • Gokhan Ozertan
  • Curtis R. Taylor

Abstract

Protection of intellectual property embedded in self‐replicating biological innovations, such as genetically modified seed, presents two problems for the innovator: the need for copy protection of intellectual property and price competition between new seed and reproduced seed. We consider three regimes in two periods with asymmetric information: short‐term contracts, biotechnological protection, and long‐term contracts. We find that piracy imposes more intense competition for seed sales than does durability alone. Technology protection systems yield highest firm profit and long‐term contracts outperform short‐term contracts. Farmers prefer, in order, long‐term, short‐term, and biotechnical protection. Depending on monitoring cost, long‐term contracts may be socially preferred to short‐term contracts, with both preferred to biotechnical protection.

Suggested Citation

  • Diana M. Burton & H. Alan Love & Gokhan Ozertan & Curtis R. Taylor, 2005. "Property Rights Protection of Biotechnology Innovations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(4), pages 779-812, December.
    • Handle: RePEc:bla:jemstr:v:14:y:2005:i:4:p:779-812
    DOI: 10.1111/j.1530-9134.2005.00083.x
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    References listed on IDEAS

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    1. Takeyama, Lisa N, 1997. "The Intertemporal Consequences of Unauthorized Reproduction of Intellectual Property," Journal of Law and Economics, University of Chicago Press, vol. 40(2), pages 511-522, October.
    2. LeRoy Hansen & Mary Knudson, 1996. "Property Right Protection of Reproducible Genetic Material," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 18(3), pages 403-414.
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    4. Matin Qaim & Alain de Janvry, 2003. "Genetically Modified Crops, Corporate Pricing Strategies, and Farmers' Adoption: The Case of Bt Cotton in Argentina," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 814-828.
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    Cited by:

    1. Khachaturyan, Marianna & Yiannaka, Amalia, 2006. "The Market Acceptance and Welfare Impacts of Genetic Use Restriction Technologies (GURTs)," 2006 Annual meeting, July 23-26, Long Beach, CA 21329, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Stefan Ambec & Corinne Langinier & Stéphane Lemarié, 2008. "Incentives to Reduce Crop Trait Durability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 379-391.
    3. Eaton, Derek, 2015. "Innovation and IPRs for Agricultural Crop Varieties as Intermediate Goods," 2015 Conference, August 9-14, 2015, Milan, Italy 211581, International Association of Agricultural Economists.
    4. Wilson, William W. & Huso, Scott R., 2008. "Trait Stacking, Licensing, and Seed Firm Acquisitions on Genetically Modified Grains: A Strategic Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-20.
    5. Derek Eaton, 2013. "Innovation and IPRs in the Agricultural Seed Sector," CIES Research Paper series 19-2013, Centre for International Environmental Studies, The Graduate Institute.
    6. Gürtler, Oliver, 2006. "Software Piracy in the Video Game Market," Bonn Econ Discussion Papers 20/2006, University of Bonn, Bonn Graduate School of Economics (BGSE).
    7. Eaton, Derek, 2014. "A model of IPRs in the international supply chain of seeds and agricultural production," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182643, European Association of Agricultural Economists.
    8. Gürtler, Oliver, 2005. "On Strategic Enabling of Product Piracy in the Market for Video Games," Bonn Econ Discussion Papers 36/2005, University of Bonn, Bonn Graduate School of Economics (BGSE).

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